Three central banks and US employment will keep traders focused – Weekly outlook 30th July

Whilst summer may be in full swing and many pairs are caught in ranges, we may have the potential for some stimulus in the form of the three central banks that are due to meet this week. On top of that we have the monthly employment data due for the US which could see some volatility.

They say the devil is in the detail, well last Friday’s US GDP data was quite mixed although it did not stop Trump claiming that this was a great outcome from his policies. The detail may partly back him up although whether it will be sustained is another question, as tax cuts can only take effect once unless he intends to cut them further.

Trump started with trade tariffs and mentioned that some economies were taking advantage of keeping their currencies weak a little over a week ago. Well maybe he has a point the ECB have moved slowly and Draghi and co have retained a dovish tone even though they claim that the European economy is doing well. China may not be doing so well according to their numbers, which may be part of why we are seeing the Yaun drop in value against the dollar, however as I said last week this weakness is taking the sting out of the tail for exports and making imports look less attractive. Trump may not win the war of currencies.

The commitment of Traders sentiment may be suggesting a slight shift towards a weaker dollar although this is not necessarily being shown in the technicals of the majors so far.